Healthcare warning for the nation

Despite bold promises by Gov. Arnold Schwarzenegger at the beginning of the year to solve the state’s healthcare crisis, California’s legislature appears on the verge of doing nothing at all or enacting legislation that could make matters worse.

It’s a warning for Washington, since what happens in the Golden State frequently sets a pattern, whether it’s passing tax-limit initiatives like Proposition 13 or legislating fuel efficiency and anti-pollution standards for car manufacturers.

The clumsy failure so far by the governor and the legislative leadership in Sacramento to construct a plan most Californians would support could easily be replicated when Congress gets around to dealing with the nation’s health crisis, perhaps in 2009, with the same fruitless outcome.

Schwarzenegger (R) announced on Tuesday that he would call a special session of the legislature to concoct a deal that incorporates his framework (he never got around to submitting a bill) for subsidizing the health insurance industry, and the unimaginative plan hurriedly passed by the Democratic-controlled legislature in its waning hours. The governor has promised to veto the Democratic bill, which fails to control costs, keeps the for-profit insurers running the show and still would leave many of our 19 million uninsured residents uncovered.

Both approaches share the same loopholes. They push people into private insurance plans while failing to control runaway premiums — up 6.1 percent this year and 87 percent this decade — or rising deductibles, co-pays, and fees. The Democratic plan protects profits for private insurers by enabling them to dump the sickest patients into a public pool.

Today’s train wreck was framed by a couple of predictable developments: Republican and business opposition to any meaningful reform; and a feckless effort by the Democratic leaders to play ball with the insurers, who are doing fine with the status quo.

Last year the legislature passed a Medicare-like bill that guaranteed health coverage for California residents without protecting private insurers. Schwarzenegger vetoed it. This year they sent him a worse bill that he still promised to veto. Perhaps they were just seeking political cover.

The public is ahead of the politicians. A Field poll in August showed Californians’ support for the private insurance plan plummeting, while more favor the comprehensive approach that the legislature passed last year. It also suggests the compromise plan, which will end up on the ballot, has a poor prognosis of passing.

California Democrats are squandering the momentum for genuine reform. As the chairwoman of the state Senate Health Committee, Sheila Kuehl, lamented, “until we squarely face the fact that premiums imposed by the insurance companies are rising 3-4 times faster than wages every year, all the reforms that keep those insurance companies firmly in place are doomed to failure.”

There’s a critical lesson here. Polls show the Democrats well positioned to take back the presidency and pick up seats in Congress next year. Healthcare reform is the voters’ top domestic issue.

Yet the major Democratic presidential candidates all propose health platforms that, like the Democratic leadership plan in Sacramento, inefficiently build in costly private insurance schemes. To demonstrate to voters they would actually solve the country’s healthcare crisis, the candidates need to be realistic. In California, about $19 billion will go to the insurance companies this year for overhead — paperwork, bureaucracy, corporate profits and payrolls. Not a dime of that gets spent on actual health care.

The traditional Medicare system in which the government negotiates and pays service fees for private and public providers and mails its enrollees a card that gives them access to the doctors and hospitals of their choice — without diverting profits into the pockets of the insurance companies — is the logical starting point for universal healthcare. That’s also the basis for the bill that has the most supporters in the current Congress: HR 676, known as the U.S. National Health Insurance Act.

It’s time for the Democrats to lead California and the country back toward a health care system that focuses on people, not profits.

DeMoro is the executive director of the California Nurses Association/National Nurses Organizing Committee and a vice president of the AFL-CIO.